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REIT Organizational Structure and Operating Characteristics

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  • Brent Ambrose
  • Peter Linneman

Abstract

As a corporate organizational form, real estate investment trusts (REITs) fall into two competing property management structures: internally advised and externally advised. This study tests the hypothesis that, due to their superior ability to resolve conflicts of interests between REIT management and shareholders, internally-advised REITs will dominate the externally-advised REITs. We also test the hypothesis that larger REITs will come to dominate the market and find support for this hypothesis. The results confirm that externally-advised REITs are responding to market pressure to conform to the performance standards set by newer, internally-advised REITs.

Suggested Citation

  • Brent Ambrose & Peter Linneman, 2001. "REIT Organizational Structure and Operating Characteristics," Journal of Real Estate Research, Taylor & Francis Journals, vol. 21(3), pages 141-162, January.
    • Handle: RePEc:taf:rjerxx:v:21:y:2001:i:3:p:141-162
    DOI: 10.1080/10835547.2001.12091049
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    References listed on IDEAS

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    1. Laura Walbert, 1994. "The Stern Stewart Performance 1000: Using Eva™ To Build Market Value," Journal of Applied Corporate Finance, Morgan Stanley, vol. 6(4), pages 109-112, January.
    2. John S. Howe & James D. Shilling, 1990. "REIT Advisor Performance," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 18(4), pages 479-500, December.
    3. Peihwang Wei & Cheng‐Ho Hsieh & C. F. Sirmans, 1995. "Captive Financing Arrangements and Information Asymmetry: The Case of REITs," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 23(3), pages 385-394, September.
    4. Capozza, Dennis R & Seguin, Paul J, 2000. "Debt, Agency, and Management Contracts in REITs: The External Advisor Puzzle," The Journal of Real Estate Finance and Economics, Springer, vol. 20(2), pages 91-116, March.
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    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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